TIDMAPC

RNS Number : 2941W

APC Technology Group PLC

18 August 2015

18 August 2015

APC Technology Group PLC

("APC" or the "Group")

Pre Close Trading Statement

In its trading update of 30 July 2015, APC stated that recent trading had been in line with expectations.

The Board continues to expect that the three main operating divisions of Component Distribution, Water Hygiene and Minimise Energy will meet market revenue expectations for the full year and that the Distribution and Water divisions will meet profit expectations. However, following completion of a detailed project profit margin analysis it has become clear that margins achieved by Minimise Energy have been negatively impacted by excessive freight charges and other incremental costs incurred to meet delivery times on a number of recent contracts.

In addition, the Board now expects the Minimise Generation business and the Minimise American business to miss the Board's expectations for the full year. Minimise Generation was formed in January 2015 to serve the UK market and contracts have not yet materialised as anticipated. This is due largely to the uncertainty around government renewables policy and the knock-on effect this has had on the uptake of PV-T technology. A major contract, valued in excess of GBP1m, which has been active since January 2015, and was due to be delivered this year, has now been delayed. Business in the Americas is developing more slowly than previously expected, in part due to the short term fall in energy prices.

Due to the above the Board expects that while the Group will be in-line with market expectations at the revenue line, underlying operating profit for 2015 will be below market expectations.

In light of this, Leonard Seelig, the Group Chairman, is leading an operational review of the business with the Board. This review will further focus Group attention and effort on the markets in which the Group currently operates that will deliver greatest profitable growth in the near term.

The Board is mindful of working capital and has already taken action in order to address the impact of the Group's recent financial performance. The Board believes that its current facilities are more than sufficient to support the business.

The Board remains confident in the short, medium and longer term prospects for the Group and expects to update the market with the findings of this operational review in the late autumn.

Leonard Seelig, Chairman of APC Technology Group, commented:

"It is disappointing that after considerable effort and investment, the Generation and American businesses have not been able to deliver the contracts and growth expected. While this is in part due to wider market conditions, it has had an impact on the Group, given our stage of development, and we have taken appropriate action to address this looking forwards. I do, however, feel positive about the stability of the core distribution and water businesses and the actions that are being taken to improve profitability in the growing Minimise Energy business.

My role in leading the operational review will now be to focus the business on those divisions in order to strengthen the Group's balance sheet and to deliver a profitable and cash generative business in future periods."

Enquiries:

 
 APC Technology Group PLC             01634 290588 
 Leonard Seelig, Chairman             www.apc-plc.co.uk 
  Mark Robinson, Chief Executive 
  Officer 
  Richard Hodgson, Chief Financial 
  Officer 
 Cantor Fitzgerald Europe Limited 
  (Nominated Advisor and Broker)      020 7796 8800 
 Andrew Craig / Will Goode (Corporate Finance) 
 Redleaf Communications (Financial 
  PR)                                 020 7382 4730 
 Rebecca Sanders-Hewett / David Ison / Susie Hudson

Notes to Editors:

Since 2009 APC has been in a process of diversification. The distribution of specialist electronic components, which has represented the majority of revenues since incorporation in 1982, remains a key part of the business but the rapid growth of Minimise Energy, coupled with the creation of Minimise Finance and Minimise Solutions, the recent acquisition of Green Compliance plc and the even more recent incorporation of Minimise Generation has created a sustainability focussed business that is set to grow rapidly in the UK, North and Latin America with the potential to generate significant, profitable growth for the foreseeable future.

APC's sustainability related activities are designed to offer its clients a simple, 'one stop shop' approach to meeting their sustainability obligations. With sustainability related consulting, energy management, water management and project financing under one roof the relationships required to overcome the obstacles which have historically held up sustainability enhancing projects are being created.

APC's electronic component distribution business, trading as Advanced Power Components, sells specialist components into defence, aerospace, space, transportation medical and industrial sectors. The Group's value-add business model, centred upon the technical experience and capabilities of the Group's sales engineers, are of value to both clients and suppliers, for whom APC typically acts on an exclusive basis.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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August 18, 2015 02:00 ET (06:00 GMT)

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